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Mad Money

News/Business. (2013)

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Jim Cramer 13, Diana 7, Dell 6, Cramer 6, Us 6, Hoveround 4, Merck 3, Nike 3, New York 3, Pfizer 2, Spec 2, Jeremy 2, Jim 2, S&p 2, Samsung 2, Virginia 2, North America 2, Fda 2, Michigan 2, America 2,
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  CNBC    Mad Money    News/Business.  (2013)  

    March 18, 2013
    4:00 - 5:00am EDT  

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welcome to "mad money." other people want to make friends. remember that? i just want to make you money. money. money. money. money. for the past eight years, my job has and continues to be not just to entertain you but to educate you. so on this fabulous eighth anniversary of "mad money," i want you to continue to call me
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at 1-800-743-cnbc. welcome to the eighth anniversary edition of "mad money." not a great day for an anniversary although the dow broke its winning streak. i'll be unabashed about it. sinking 25 points. nasdaq declining -- i realized regular people that play this game needed help. you needed guidance from someone impartial who wasn't after your fees, didn't want your commissions. in short, you needed an investing coach. i've been trying to fill that role every night five nights a week ever since. so tonight to mark the show's fantastic eighth anniversary, we're going to do the exact same
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thing we always do, help you try to make some money the best way we know how. let's get into it. start with the game plan. we've got a smatter of earnings coming out. before we get to that focus on the event that will control the market next week, there's not too much to this because wednesday there's a federal reserve meeting. i'm going to be blunt. from now on we are on fbfh watch. what's that? go on, haven't you been watching around here? fbfh is the fed bull from hell. that's my new term on how so many people are focused on when the fed is going to stop buying the bonds it accumulates every single month to keep your interest rates low, your mortgage low. and when is the fed going to start selling its to stock boosting in the stock market. so many prognosticators think in one of these meetings, maybe this one, bernanke will signal that things have, oh, no, gotten better. and that's code, that's code for the great unwind is upon us, that the fed bull from hell is unleashed from on high and nobody ever made a dime getting hit by lightning. so if we sell off in wednesday's
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meeting, you know it's the fear or the fbfh at work, okay? repeat after me. when the fed starts selling its bonds, that's the end of the world. isn't that what people say? except for fuddy duddy old me. we're trying to make money or save money. you know i like tech. it's the part of the stock market that's still cheap. has been buying a bunch of tech stocks. but there's one sector of tech i want you to avoid like the plague. it's the personal computer sector. i think it's being challenged by smartphones with the new samsung announcement, tablets, competition is cut throat beyond all belief. that segment of the industry is in what we call secular decline, it's still going lower. with that in mind, i think you
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should take action on monday morning. i want you to sell dell. you own dell, it goes, okay. it is now on the single biggest sell, sell, sell list i've ever had. right now michael dell is trying to take the company private for little less than where the stock is currently trading. i sat wrapped this morning on "squawk on the street" sitting next to david faber. when he detailed the shocking decline, you know when we're on tv and a guy's saying stuff and, geez, really? he was telling me the shocking decline in cash flow dell has experienced since the steel started percolating, dell is doing terribly. i'm confident the stock will go $8 and change. it was shortly before the deal was announced. you cannot be in dell, people. it is dangerous now. i believe you must ring the register first thing monday morning. yes, it is dangerous. and you have to sell dell. hey, dude, get out of dell. tuesday we get february housing starts. right now bulls are saying we could build as many as one
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million homes this year. i think because of the inventory shortage we could need as many as 1.2 million homes. make no mistake housing and -- two big drivers of this economy and i think we'll be pleasantly surprised when we get this housing starts number. of course, the fed bull from hell crowd will ratchet up their bets. that lightning will strike on wednesday if they see a strong number. and i think they will be, unfortunately, unpleasantly surprised when they see it because nobody in that crowd wants to see any good. i actually like things that are good. old fashioned. housing's so strong that it's lifting all boats including brunswick by the way and the housewares. so let's listen to william sonoma conference call on their earnings on tuesday to be sure the carryover's intact. now, i'm thinking this may be
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long in our ever expanding great index or maybe it's the greater gatsby index. i once bought a pot for like $200. it was a big, round cast iron, red thing and then i saw it at the jersey shore outlet for almost half the price. and i am still kicking myself. eighth anniversary, nothing's changed. now, we use a ton of gauges to measure things like retail sales and employment around here that are bottoms up, meaning we look at what individual companies are telling us. how about the nation's largest uniform company cintas reports on tuesday. and insists sales are strong. that's a good precursor for next month's employment number. i'll follow up with the information later, don't buy the stock it's had too much of a move. i know nothing will come close to the all important on the heels fed meeting. on the heels, i have heels, nothing's ever on them. i got $59 at jersey shore outlet, two for a hundred. wednesday we'll get a report from the best barometer of international trade i know, and that's fed ex. the company always gives you
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worldwide outlook. it's ceo is a trained economist, so he gives you a vigorous and perhaps sobering global update. you want cheap tech, go with j bill, i believe about to start regaining its old growth path. this used to be a high flying tech when tech was en vogue. give it another quarter. this one might be effective by lumpy apple orders. and i bet it returns to greatest after this one. thursday we get a play reporting that acts terribly. lulu lemon. i think lulu lemon can be the nike for women's clothes, but i also know it's highly valued and retail is choppy right now. so let's be cautious ahead of this name, as cautious as i am about nike, which also reports thursday. let's take passes on both, okay? however, i'm going to stick my neck out and say that i think ross stores seems to be at the right spot. it is hard to keep a good retailer down, and ross reports
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on thursday. and it might be a smart place to go if you're looking for a post-fed meeting play. meaning if the fed causes the market to go down, maybe circle into ross between 230 and 4. on friday we have two reports from companies with stocks that have been defying gravity, darden and tiffany. these two are failing upwards. darden missed last two quarters estimates with disappointing numbers with olive garden and red lobster. tiffany's missed three quarters in a row. we just learned that qatar or qatar investment 10% owner just bought 823,000 shares. i would not chase this great member up at these levels. however, if it gets hammered on the report, if they come after tiffany, this diamond and silver company stock is coated with teflon. so i would do some buying. it's not tiffany's so much as tefloni. bottom line, reported earnings including nike, fed ex, lulu lemon, but this is about the
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fear of the fed bull from hell. so wednesday's fed meeting is literally like it or not the only real event that matters. why don't we take some phone calls? eighth anniversary, we still take phone calls. jim in florida. jim. >> caller: how about a big boo-yah. >> huh? >> caller: how about a nice boo ya for our new pope. >> yes. yes. how thrilling is that? i was thrilled about that. that will be great. what's up? >> caller: blackberry, bbly. >> yeah. >> caller: it looks like they have good sales generated, and they've got good foreign interests. is it a good time to buy right now? >> this stock trades 1215, 1215, 1212. wait until it gets back to 12 to trade it again.
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right now i fear you may be behind the eight-ball if you buy blackberry. another year older and wiser. lots of earnings out from big companies this week, but the most important, it's the wednesday fed meeting. it could actually be the only thing that matters. our eighth anniversary celebration is just getting started. i was excited about this. all night we're highlighting memorable moments since the show began. and remember, your opinion counts. you voted online for your favorite moment. and we'll reveal the viewer's choice at the end of the show as we go to break, that's for commercial, i want to rewind to a moment i'll never forget which proves that panic is not a strategy. >> p&g is now down 25%. >> if that's true, that stock is there, you go and buy it. it can't be there. that is not a real price. >> that is liquidating. >> 49.25 bid for 50,000 proctor,
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proctor just jumped 7 points. i buy 50,049, flip it at 59. i just paid 500 gs. the machine's broke down. greatest story never told. you'll never know what happened there. >> coming up, sailing for a spec. the dry bulk shippers have been scraping along the bottom of this market, but as global trade takes off, could these boats finally be buoyant? cramer's hopping aboard to find which of these shipping stocks could navigate a turnaround. and later, ridiculous returns. we are eight years young today, and to celebrate cramer's looking at some of the top-performing stocks since we've been on the block. can they continue to soar over the next eight? plus, drug money diagnosis. as "mad money" gets older, we've become more focused on keeping healthy.
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and few stocks bring good health to mind more than merck. shares have been lagging this market's red-hot run, but could its prognosis soon improve? cramer's putting it under his x-ray vision to find out. all coming up on "mad money." "mad money."
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and now every hoveround comes with this handy tote bag and cup holder for access to your favorite items. and right now, get this limited edition hoveround america travel mug free with your hoveround delivery. [singing] hoveround takes me where i wanna go. call or log on to hoveround.com to find out where a hoveround can take you! jim cramer. >> jim cramer. >> in the world of cable news famous, jim cramer is seriously famous. >> this money manager literally rolls up his sleeves to host cnbc's "mad money"? >> jim cramer. >> jim cramer. >> you have to be nuts to understand the market, and i am nuts about the market. it's a triple sell. don't buy. >> don't buy? >> i'm grounded and spend all
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day listening to my dad yell at "mad money" with jim cramer. >> bottom line, everything's going to be fine. stark industries. that's a weapons company that doesn't make weapons. >> sit in front of the tv and watch "mad money" all day long. >> are you okay? >> oh, yeah, it's nothing. i was a guest on "mad money" last night. >> what's happening? okay, stop. stop it. >> hello fellow facebookers, i'm here to do one thing, get you, more friends. >> there is one guy i like, he gives it to you straight. >> it's "mad money" with jim cramer. >> what's up with the stock market? >> i don't know. what's up with your face? >> can that be jim cramer from cnbc's "mad money"? >> i have brought in a financial heavy-hitter. >> please welcome jim cramer. >> i was stupid -- >> don't say that. you don't have -- it's very
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hard. >> math's stupid. >> yes. >> "mad money's" jim cramer. >> jim cramer. >> look. and then you get mad. >> mr. cramer, are you the tv personality who regularly shouts and badgers on "mad money"? >> i think badger's debatable, but, yes, i have a dare you say flamboyant personality. >> you could try hitting some buttons. >> you have beautiful eyes. >> the president wasn't as favored this morning as jim cramer. >> i've never seen the president -- >> we're joined now by cnbc's jim cramer and former chairman of the federal reserve, alan greenspan. >> i got my own show. very lucky guy i am. thank you. for "mad money"'s eighth anniversary show, i'm going to come out here and do the same thing i try to do every single night, teach you how to be a better investor and help you
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identify stocks that have a potential to go a whole lot higher. even though this market finally broke the fabulous ten-day winning streak, this session, it's so incredibly difficult to find stocks that represent truly dirt cheap values out there. so many things have rise and tide, lifted all boats. ha, that's why as part of this eighth anniversary version of speculation friday i want to draw your attention to a sector that hasn't really participated in this rally at all. even though it's going to benefit from a global economic recovery that you know i see happening, i'm talking about the dry bulk shipping industry. the business of transporting commodities like coal, iron ore and grain across the ocean, dry bulk shippers are heavily tied to the emerging economies in asia, which have a veracious appetite for the commodities they transport. you measure the strength of these companies using a thing called the baltic dry freight index which tracks day rates, how much it costs to rent, for
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dry bulk shippers. this index used to be a fairly important measure of the global economy. but too many ships, and the only thing the baltic dry index has told us is that it's a real lousy business to be a shipper. >> house of pain. >> it had its worst performance in 26 years, falling over 41%. thanks to worries about a chinese slowdown as well as an oversupply of ships. in fact, when you look at -- sorry. when you look back, the baltic dry index has been in a giant down trend ever since it peaked in may of 2008. the index hit a low of 661 last fall. but i believe we're seeing signs of a bottom in the baltic dry index could at last finally be able to climb. in fact, it's already rebounded off its lows. it's up 26% year-to-date. so why do i think it's bottomed? the fact is, dry bulk shipping rates simply can't get much lower than where they are now.
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when rates go this low, they make up a low this level, the ship owners stop taking them on voyages because they don't earn enough to cover the cost of the trip, the hate boat. things are so bad they literally can't get much worse. the dry bulk space goes through periodic times. it can take years to fill orders. so when things take a turn for the worse, the market gets choked with additional supply for many years in the future. 2013 marks the sixth year of overcapacity in the industry. six years it's been a bad business. however, there are signs that dry bulk shippers could be approaching an inflection point. the pessimism about the business meant they're ordering fewer and fewer new ships and now they're starting to scrap older ships at record levels. that's how you get to the point where the day rates can bottom. doesn't have to do with world
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trade but fewer ships. that's how the industry recovers. in fact, we're seeing the same thing happen in other types of shipping stocks. for example, the oil tanker business is at long last getting stronger with not a dread, nordic american tankers finally breaking to the upside with a 6.7% yield and a better day rate. i am, are you ready skee-daddy, giving you the blessing, buy, buy, buy, to buy nordic american tanker right here. did i really say that? yeah. plus, a number of very smart distressed debt money managers are starting to focus on the dry bulk sector. wilbur ross jr. rang the bell this morning looking for a new private equity fund that's going to buy distressed shipping and other transportation assets. meanwhile, private equity outfits sniffing around. blackstone, remember they bought housing at the bottom, they're betting on recovery in shipping. these are smart guys. we want to invest alongside them. in the dry bulk, there are only three publicly traded companies that are left.
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there used to be about 20 of them. diana shipping, navios maritime partners. i think diana, simple, dsx is the only one to own. this is an $8.88 stock. hey, you know what? that's good karma in itself. because this is our -- what'd they do with my little eight-balls? anyway, it's our eighth anniversary. so we got an $8 stock. and i've got three -- it has to work just alone on that, right? anyway, it's got a stock market capitalization of $730. why diana? okay. what got most dry bulk shippers into trouble was that they used a great deal of leverage to buy a lot of ships back at the peak of the cycle before the financial crisis hit. then the companies got crushed as day rates plummeted and values of ships sank. 2008, a cape size vehicle, that's the largest size of dry bulk ship costs around $155 million. do you know that same 5-year-old ship is only $34 million?
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that's about an 80% decline. unlike the other players though, diana used less leverage instead raised equity and built up a cash horde. 92% of their available days this year are covered by more defensive one- to two-year time charter agreements. these things allow the company to hold up much better than it's competitors. even though i think the dry bulk industry might be bottoming, it's still bad enough that i want to stick with the safest player. diana, best of breed. you know how we always like best of breed. nothing's changed in eight years. beyond that looking into 2014, management is somewhat shifted to somewhat shorter duration times. that's good. they think rates are going higher. so they locked in rates when they could, and now they think it's going higher. meanwhile diana's used the weakest in the dry bulk market. buying ships at ultralow prices
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buying at a time when no one else can. why? because they kept relatively clean balance sheet. company can purchase $900 million worth of ships. and as day rates recover for dry bulk, the value of those ships will increase dramatically. if secondhand ships return to the reversion to the mean, that would be 77% higher than where they are now. so this diana, what a fabulous opportunity. and it's been the one you've been taking advantage of for the past two years. diana's right. now, the stock is less than -- it's moved. it's less than 50 cents off of its 52-week high, but currently trading at a 4.5% discount with $9.29. if i'm right about the dry bulk space, the value of those assets should increase dramatically over the next 18 months for this $8.88 stock. here's the bottom line, if you believe that the bulk dry index could be bottoming, as i do, then the best way to play it is with dsx diana shipping. remember, speculative stock, $8.88, buy in small increments $8.88, buy in small increments and i beg you limit, not market orders. jeremy in new york, jeremy.
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>> caller: hey, jim, do you think live up to expectations and be a multimillion dollar company they say it will be? where's that company headed? >> no. no. that's not going to happen. you want logistics. frankly, if you want logistics, i'm going to send you to united parcel. i'm a conservative fella. the shipping sector's been freight full lately, like frightful. anyway, i think it's bottomed. best way to play is with a spec, it's with diana. this is an $8.88 stock, and we didn't just do it because it's our eighth anniversary, although i kind of like that. don't move. much more to come as our eighth anniversary celebration continues. for investors, what is your advice today? >> okay. whatever money you may need for the next five years, please take it out of the stock market right now this week. i do not believe that you should risk those assets in the stock market.
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>> even if you were to take a tremendous loss in selling your stocks at this decline, you say take it out? >> i do not care where stocks have been. i do not care where stocks have been. i care where they're going, and i don't want people to get hurt in this market. >> coming up, ridiculous returns. we are eight years young today, and to celebrate cramer's looking at some of the top performing stocks since we've been on the block. can they continue to soar over the next eight?
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this is going to be the most important useful class you'll ever take in any university anywhere. texas, tulane, virginia. penn state. michigan. >> we love "mad money." >> get fired up. get fired up. welcome to "mad money" 101. the one class that could make you some serious cash. now, if that isn't a reason to skip class, i don't know what is. i have a big announcement related to our next college show very soon. it is under tight wraps. welcome back to the special
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eighth anniversary edition of "mad money." feel like celebrating with us? here's what i need you to do. go ahead and tweet me @jimcramer. you may see your tweet down here below the yellow thing on the cnbc twicker near the floor that i only like to sip cheap scotch at after bad days like we used to have. anyway -- ever since the show came on the air, we were dedicated to the simple proposition that you, yes you, could be beat the stock market. you should build a portfolio of stocks to leave the averages in the dust if you have the time and inclination. i've always believed that's the way for you, a regular person, to invest. but they have this whole industry of people dedicated to tell you why it's theoretically impossible to beat the market and you're better off putting your money in an index fund that mirrors the market like a low
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cost etf that does the same thing that want you to be kept in your paycheck chains. point out just how wrong i think he is. let's look back to eight years ago when "mad money" got started and i weighed 20 more pounds than i do now. although i have taken off ten pounds even before i started the show. anyway, if you had put your money in a fund that mirrored the s&p 500 back then on march 15, 2005, how much do you think you made? the s&p returns with 52%. you would have made even less than that because even an index fund charges fees. and 50% over five years, i don't know, i want to do better than that. what if you had used the "mad money" strategy, picking high quality stocks to invest your money in them? to show you how well you could have done let's look at the top eight performers over the last eight years. to make this fair, we're only going to look at stocks that were big enough to talk about eight years ago, none of the single-digit names we never could have told you about because market capitalizations were too small to mention on television. you know what, when you screen out all the formally microcap players, this list has a ton of familiar faces to you if you've
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been watching this show over the last eight years. the best performer over the last eight years it's -- priceline. yeah, priceline.com. up 3,133%. in other words, enough to buy a car. we recommend this stock many, many times over the years and remains the best of breed online travel player. terrific kicker now going to soon merge with kayak. second best performer, regn, up 2,078%. you're now 30 times that amount of money. think about that. and regenron, i recommended it when it was trading less than $5 a share. and we believed. go back and look at that interview. we've ridden this baby the whole way. stands as a testament to the power of speculation, especially when it comes to biotech stocks. regenron op stocks. last year it was the best performer in the whole nasdaq. that's another terrific example
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of money that you could have made by actually owning an individual stock and not an index. by the way, it's not just ie lee ya that's driving here, that's the revolutionary regeneration drug going for but also this new anticholesterol drug a total breakthrough for anyone who can't take one of the current statin treatments. next up, netflix, up 1,882% over the last eight years, a stock more than doubled in the last three months. the king of streaming video over the web is so hot that apple should just buy the whole darn thing in order to bring back the growth apple used to have. two birds, one stone. and a stock that's managed somehow to fly under our radar screen. i got to tell you it's been killing me over the last eight years that i missed this stock. well, let's just say, i didn't do my job because i'm talking about new market. i see it every weekend in the chart book. i've never talked about it. up 1,587% in that period.
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i should have known because it's a specialty chemicals company and i follow that industry mainly focused on making petroleum additives used to improve the refining process or augment fuels refiners are using. the market is controlled by four players. that was bought by birkshire hathaway. it's a way to play the rapidly growing business as refiners rely on technically additives. this is incredibly shareholder friendly company, just retired 23% of share counts since 2007. $25 special dividend back in november. honeywell, you should buy them. if you ask me. dave coty hasn't asked me. he's the ceo. the next two names are a pair of biotech stocks that we have recommended and recommended and recommended starting at the same time in 2010. they made us an awful lot of money, but may have been bigger if i'd gotten behind them
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earlier. biomarin, which we had on recently, up 1,197%. second best performer in the last eight years is cramer fav, salesforce.com, the king of cloud computing, up 1,049%. the visionary ceo came on the show in november of 2008 right in the midst of the financial meltdown and told us his company would be just fine. it's racked up a fabulous 660% gain. you know i think salesforce is far from finished. just announced when mark was here, that was a thing of beauty. shot the lights out. finally, eighth best performance is corp labs up 1,406%. core is a company that helps oil users get more crude out of the ground. we've been behind this for ages. they almost always come on after the quarter's reported.
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i first recommended it in august of 2006, rallied 284% since then. i think it has plenty of room to run as you know with a recent interview with the ceo of the company that's responsible for a great deal of the technology behind america's oil and gas renaissance. here's the bottom line, as we look back on the last eight years of "mad money" remember if you bought any one of these megawinners as a diversified portfolio eight years ago, you would have left the averages in the dust even if every other stock was a loser. don't be discouraged by the doubters. you can beat the market if you're willing to do the homework and find game-changers like the stocks i just mentioned. they can be spotted because as you know we spotted all but one for you. and we hope that you two have benefitted from one of these fabulous selections. don't move. we'll reveal the viewers choice for your favorite moment since the show began a little later on. first, check out our trip to one of america's most exciting energy finds in decades.
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>> the united states has a new frontier, the oil fields of north dakota. "mad money" has boots on the ground in the badlands to show you how homegrown innovation and technology have opened up one of our biggest oil discoveries. >> 11,000 people were going to hire in north america this year. >> this is all about north america.
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and now, great moments in "mad money" history. >> price of oil here in the u.s. actually been in free fall. a mosquito bothering me the whole show. anyway, in this case i got him. >> great moments in "mad money" history. and now it is time for a very special eighth anniversary lightning round. that's right. are you ready skee-daddy? let's go to glenn in virginia. glenn. >> caller: yeah, jim. partner with lp.
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>> prefer lng here because i think there could be financing. i like both companies. these are run by suky. les in wisconsin. >> caller: first-time caller. my wife thinks you need a new greeting contest or something. anyway, happy anniversary eight hour -- eight years we've both gone over. here's my stock. it's skyworks, swk. >> oh, it's okay. first of all, thank you. both from samsung and apple you would think that would move up but i got to tell you don't buy although it is inexpensive. let's go to char. >> caller: what do you think exr? >> i like public storage better. it yields more. let's go to mike in new york. mike. >> caller: this is mike from new york, and i want to wish you and your staff a crazy eighth anniversary boo-yah. >> yes. thank you. >> caller: and thanks for
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helping all us novices. my speculation stock play is sqn. >> if you had said speculation, i would say absolutely not. i do not like that company, but i will let you get away with -- let's go to new jersey. jim. >> caller: jimbo. >> yo, yo. >> caller: boo-yah. >> boo-yah. >> caller: wgo, winnebago. >> that's for me. i like that stock. ladies and gentlemen, in conclusion of the lightning round. let me give you a flavor for what's going on. here are some of my buddies i brought. take it easy. i own a couple longhorns. i know the drill.
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welcome to the heart of american manufacturing. coming to you from the ford f-150 plant in deerborn, michigan. who says we don't make anything anymore?
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we got to talk to the man himself, ford ceo, mr. malali, it is a privilege and pleasure to be here. another memorable "mad money" moment on the road at ford, which you know i think is bottoming right here. you know, i want to thank the people at the plant for all your hospitality. right now our eighth anniversary celebration continues. after this market's remarkable ten-day winning streak, what can you really actually buy right now without feeling like a chump for chasing a stock that's already run up a lot? how about a big pharma company with a big 3.9% yield? a heck of a lot better than treasuries after the tax benefits. it's been left behind by the rest of its cohort. i can't believe i'm talking about this one because it's so far behind.
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i'm talking about one of the great american companies, merck, mrk, the pharmaceuticals giant that's stumbled more times in the last few months than a college kid on st. paddy's day. since early december, the early pharma names have roared. pfizer up 12%, bristol miers up. i'm typical of my eighth anniversary, i somehow got blue ink on my hand. and cell gene jumped 43%. meanwhile, merck has done nothing. it's actually down about 1% over the same period. right now there are reasons merck has underperformed the rest of the ones. in december, the good -- in december, the company got bad clinical trials from a new cholesterol drug that they were working on. and i thought it was going to be a big one, i have to tell you. so merck decided to stop development here in the u.s. and pull the drug overseas where it was already approved. this was one that i thought was just going to be the blockbuster. and then on february 1st, we learned that merck plans to delay submitting their osteoprosis drug to the fda until they have new data pushing
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back to 2014 maybe at the earliest. and just yesterday we learned that the fda is looking into whether a class of diabetes ii drugs may increase risk of even pancreatic cancer. two blockbuster drugs provide $9.8 billion in combined sales. that's a heck of a lot of bad news in not a lot of time. yet i think this is the moment to perhaps swap out of the higher flying pharma names and swap into merck, because i think merck's ready to play catchup. i just think its time is coming. how can i say that with all these recent negatives? first of all, some of these things are overblown. like whether merck's diabetes 2 drug really causes pancreas problems. this issue has been kicked around for years. merck has done some really good studies and had a pan cee tights on the label since 2009. the important thing to recognize is that the fda hasn't reached any new conclusions. they are just doing a study.
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a super fast growing drug doctors are very comfortable with because it does a terrific job of controlling blood sugar in patients with type 2 diabetes. and given that the drug's sales were up 25% last year, i think this drug is the reason to buy merck, not a reason to sell it despite those recent, hideous headlines. let's forget about the headline risk for a second. why don't we look at the fundamentals. right now merck has the least exposure to drugs losing patent protection of any of the big pharma companies. merck is a terrific animal health business they can spin off. ala pfizer, i pushed that one pretty hard. rapidly growing back the hpv vaccine that can help prevent cervical cancer. just that business alone should give close to $1 billion in increment through 2020. plus, the benefits of merck's merger should finally be integrated by the end of the year. expected to boost $3.5 billion
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to $4 billion in annual savings by the end of 2013. remember we had the charles river guys on. they can really do a lot to trim their costs down. and merck still has a very long pipeline filled with near-term opportunities. 16 drugs in phase 3 development, that's the last phase. they currently have three drug candidates under review at the fda. plan to file five additional drug applications and 20 more drugs in phase 2 development or earlier. that's amazing. these guys are loaded. merck is trading at 11.6 times next year's earnings estimates. and at these levels, they have the most upside of any of the big pharma companies. this is a $44 stock i say could add $10. at that level, merck would sell about 13, 14 times earnings. i think the estimates are too low which is still cheaper than bristol myers. and the company is paying you to wait. i still like the other big pharma names like pfizer and bristol-myers. these stocks have run a lot
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while merck has done nothing. and when you stop fretting about the headlines and look at fundamentals, i think merck could be a terrific buy here as it plays catchup to the industry. first, check out this unexpected question that made history right here on the "mad money" set. >> after the wild market we've been having, i'm prescribing some family therapy. >> i do have a question for you, i've been thinking about this for a while. and i was -- >> oh, my goodness. >> will you marry me? >> oh, my god. >> congratulations.
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welcome back to "mad money." now the moment you've been waiting for. viewers' choice voted by you the most memorable since the show began. >> i'm sure someone -- >> bernanke needs to open the discount window. that's how bad things are out there. he has no idea -- >> cramer. >> i have talked to the heads of almost every single one of these firms in the last 72 hours, and he has no idea what it's like out there. none. and bill poole has no idea what it's like out there. my people have been in this game for 25 years. and they are losing their jobs. and these firms are going to go
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out of business. and he's nuts. they're nuts. they know nothing. >> first, let me use this moment to thank you, the viewers, and to thank cnbc the network for giving me this amazing platform to help inform you and in that case the federal reserve about what was really happening behind the scenes, what's really driving everything from the stock market to economics and, yes, to the fed. we do have two important takeaways from the they know nothing rant. one negative. first negative. fed more than completely disregarded my comments that faithful friday. we know from the just-published transcripts of the federal meeting that i was the butt of laughter for my passion. and my insistent that the firms were going to go out of business and thousands of people were going to lose their jobs. the transcript says laughter after someone mentioned my attempts to get them to cut interest rates fast to force a crash. he who laughs last laughs the hardest. the more positive takeaway is that i resonated with you the viewers. got many of you out of stocks or cut you back in your holdings before the financial crisis crushed the market.
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and i am proud of that. my passion got through to you. and may i again thank our fabulous network for sticking by me in the moment that many regarded as erratic. i want to be reverential to the staff of "mad money," the hardest working people in show business led by incredible executive -- fabulous executive producer regina and our amazing head writer and only writer, my longtime collaborator cliff mason. i'm indebted to everyone from the network to the staff to most importantly you for giving me the opportunity for eight great years. and here's to hoping for eight more. stick with cramer.
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